November 30, 2020
On November 20, 2020 the Trump Administration issued final rules (initially proposed in 2018 and 2019) aimed at lowering Medicare drug costs and reducing regulatory burdens in the Medicare program. Specifically, the Department of Health and Human Services (HHS) issued the following:
- PBM Rebating in Medicare. A Final Rule (and Fact Sheet) which removes the existing safe harbor for PBM drug rebates in connection with the sale/purchase of prescription drugs/products under Medicare Part D; establishes a new safe harbor for certain point-of-sale price reductions under Medicare Part B and Medicaid care organizations; and provides an additional safe harbor for fixed fees that manufacturers pay to PBMs for certain services.
- Most Favored Nation Drug Pricing. An Interim Final Rule (and Fact Sheet) which implements the Most Favored Nation Model, a method to calculate payment amounts for certain drugs under Medicare Part B based on a price that reflects the lowest per capita GDP of any non-U.S. member country of the Organization for Economic Co-operation and Development (OECD), among other things.
- Medicare Anti-kickback and Self-Referral Laws. Two final rules which modifies the anti-kickback statute and self-referral law for physicians and providers under the Medicare program by establishing new safe harbors for value-based care arrangements; and amends existing exceptions for electronic health records items and services under Medicare, among other things. The two final rules can be found here and here.
In the Trump Administration’s final weeks, HHS appears to be rushing to finalize regulations on drug pricing and healthcare reform. As such, these rules are likely to face legal challenges in the months to come.